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Journal of International Consumer Marketing

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The Role of Consumer Self-Efficacy and Website

Social-Presence in Customers' Adoption of B2C Online
Shopping
a c b c
Satyabhusan Dash & K. B. Saji
a
IIT , Kharagpur
b
IIT , Bombay
c
Indian Institute of Management , Prabandh Nagar, Off Sitapur Road, Lucknow, 226013, India
Published online: 07 Sep 2008.

To cite this article: Satyabhusan Dash & K. B. Saji (2008) The Role of Consumer Self-Efficacy and Website Social-Presence
in Customers' Adoption of B2C Online Shopping, Journal of International Consumer Marketing, 20:2, 33-48, DOI: 10.1300/
J046v20n02_04

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 The Role of Consumer Self-Efficacy
and Website Social-Presence
in Customers’ Adoption of B2C Online Shopping:
An Empirical Study in the Indian Context
Satyabhusan Dash
K. B. Saji

ABSTRACT. Trust has been empirically established as one of the key attributes in business to
Downloaded by [Erciyes University] at 19:13 27 December 2014

customer (B2C) e-commerce. The effect of measures to build and maintain trust in B2C Online
Shopping is subject to customer-centric behaviour factors, which cannot be controlled by the busi-
ness firm. The present study conducted in the Indian context explores the role of consumer self-ef-
ficacy and website social presence in customer’s adoption of B2C online shopping mediated by
trust, perceived usefulness, and perceived risk. The most significant outcome of the study is that
the consumer self-efficacy and website social-presence affect trust, perceived usefulness and per-
ceived risk in the online customers, and in turn positively influence the customer’s intention to pur-
chase products online. doi:10.1300/J046v20n02_04 [Article copies available for a fee from The Haworth
Document Delivery Service: 1-800-HAWORTH. E-mail address: <docdelivery@haworthpress.com>
Website: <http://www.HaworthPress.com> Ó 2007 by The Haworth Press. All rights reserved.]

KEYWORDS. e-commerce adoption, B2C online shopping, consumer self-efficacy, website so-
cial-presence

INTRODUCTION growth and prosperity in the Indian economy

The Internet has evolved as an important
marketing medium and is now becoming an in-
tegral part of a multi-channel strategy for al-
most all the business firms in India. Despite the
troubled dotcom era, the usage of e-commerce
has increased rapidly in India too (Soman et
al., 2006; Dash and Saji, 2006; Saji, 2004; Saji,
2002). National Association of Software and
Service Companies (NASSCOM) in India
has recently reported that the efficiencies of
the internet-enabled business have spurred
(NASSCOM Strategic Review, 2007). The
website enterpriseinnovator.com quoting e-Mar-
keter reports that the B2C e-Commerce in the
USA will cruise past US$200 billion by the end
of 2007 (enterpriseinnovator.com, February 5,
2007). The trend is almost same in India too de-
spite the lower investment in B2C online shop-
ping technology (NASSCOM Strategic Re-
view, 2007). In the immediate future, the B2C
firms in India are expected to reverse the
low-tech spending trend to refresh their e-com-
merce platforms (MICT Annual Report, 2006).

Satyabhusan Dash (IIT Kharagpur) (E-mail: satya@iiml.ac.in) is Assistant Professor (Marketing) and K. B.Saji
(IIT Bombay) (E-mail: saji_nair@iiml.ac.in) is Associate Professor (Marketing), Indian Institute of Management,
Prabandh Nagar, Off Sitapur Road, Lucknow–226013, India).
Address correspondence to: K. B. Saji at the above address.
Journal of International Consumer Marketing, Vol. 20(2) 2007
Available online at http://jicm.haworthpress.com
Ó 2007 by The Haworth Press. All rights reserved.
doi:10.1300/J046v20n02_04 33
 34 JOURNAL OF INTERNATIONAL CONSUMER MARKETING
It is worthwhile here to note that India’s share in
the worldwide B2C Online Shopping volumes
is very negligible (UNCTAD, 2004). Though
the internet penetration has increased signifi-
cantly, it is the trust paradigm that creates most
of the hurdle to B2C Online Shopping in India
(Cyr et al., 2005). It is in this context that the
present study has been conducted.
In order to create long-term customer rela-
tionships, firms need to build customer trust
(Dwyer et al., 1987; Ganesan, 1994; Doney and
Cannon, 1997). Customer trust is particularly
significant in the B2C online shopping as the
customers increasingly rely on the Internet for
information on purchases and can be atti-
Downloaded by [Erciyes University] at 19:13 27 December 2014
tudinally less loyal online (Jarvenpaa and
Todd, 1997; Cyr et al., 2005). The fear of online
fraud is just one factor that keeps many con-
sumers from even considering digital transac-
tions (FTC, 1998, Hoffman et al., 1999). A re-
cent gartner.com survey of 5,000 U.S. adults
showed that phishing attacks grew at dou-
ble-digit rates last year in the United States. In
the twelve months ending in May 2005, an esti-
mated 2.4 million online customers report los-
ing money directly because of the phishing at-
tacks (SupplyChainBrain.com, December 13,
2006). (Phishing, also called carding or brand
spoofing, is a type of e-mail scam designed to
steal one’s identity. Phishers attempt to fraudu-
lently acquire sensitive information, such as
passwords and credit card details, by masquer-
ading as a trustworthy person or business in an
electronic communication). Increasing reports
of lost consumer data files and disclosures of
unauthorized access to sensitive personal data
are taking a toll on consumers’ confidence in
online commerce (Pavlou, 2003; Chellappa,
2005). A recent study in India by Saji (2002)
finds that 67 per cent of the existing online cus-
tomers of Internet stores are unlikely to trust a
transaction online through a new website. The
web users will become buyers only when the
marketers overcome the lack of trust barrier
that paralyzes the would-be online shoppers.
There is consensus among the researchers
now on the various factors influencing the pro-
cess of building trust online (Monsuwe et al.,
2004). There is also a strong contention among
the online retailing practitioners that whether a
consumer’s capability to perform a specific
task online does influence the intention to trans-
act online. This is exactly what Gist and Mitch-
ell (1992) referred to as consumer self efficacy.
Although the recent publications like Hsu &
Chiu (2004) and Kim & Kim (2005) have con-
vincingly reported the significance of con-
sumer self efficacy in Internet commerce, the
motivations to go online from the self efficacy
platform has not so far been seriously
investigated by any researcher.
The uniqueness of the online shopping con-
text is that the social proximity and face-to-face
interaction with the salespeople and other shop-
pers, which in the online context are replaced by
a complex socio-technical system that is not
well understood by the consumer (Riegelsberger
et al., 2003). In the existing literature, there is no
serious investigation reported for understand-
ing the very unique feature or the way with
which the Internet medium has been designed
for facilitating online shopping (Straub 1994;
Gefen et al., 2003; Kumar and Benbasat, 2002).
This characteristic of the Internet medium may
be referred to as website social presence. The
social presence cue explores how human warmth
and sociability can be integrated through the
web-interface for positively influencing the
consumer attitudes towards online shopping,
the understanding of the influence of the same
on the online shopping context certainly needs
to be seriously investigated.
It is to be noted here that both self-efficacy
and social presence are very significant factors
in explaining motives and motivations of indi-
vidual behaviors and choices of the online cus-
tomers, and appeared to have an impact on trust
building and uncertainty reduction (Eastin and
LaRose, 2000; Hsu and Chiu, 2004; Kim and
Kim, 2005). However, as reported above, these
two unique characteristics of online shopping
context have not been fully explained in the ex-
isting literature. Also, there is also the case of
external validity of the existing models. A com-
plete understanding of consumer behaviour as a
knowledge domain requires that the validity of
models of consumer behaviour developed in
one country (mostly in the U.S.A.) be examined
in other countries as well (Adler, 1983; Bagozzi
and Yi, 1988; Bagozzi, 1994).
Consequently, it has been decided to conduct
an India specific study for addressing the two
specific research issues, viz. (i) the significance
of consumer self-efficacy and website social
 Satyabhusan Dash and K. B. Saji
presence in forming and reinforcing purchase
intention of online consumers, and (ii) the pos-
sible structural relationship that may exist
among trust, perceived usefulness, and per-
ceived risk with purchase intention of the
online consumers in the Indian context.
RESEARCH MODEL
AND HYPOTHESES
The causal link between buyer-seller rela-
tionships and customer retention and loyalty
has been duly noted by various researchers
(Bagozzi, 1975; Dwyer et al., 1987; Berry,
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1993). Trust has been identified in much of the
literature as a key component to exchange, and
as a catalyst for relationship development. Dif-
ferences in the conceptualization of trust are
due to disciplinary traditions and assumptions
used by researchers (Zucker, 1986; William-
son, 1993). Trust has been defined in various
terms, ranging from “the willingness to be vul-
nerable to the actions of another party” (Mayer
et al., 1995, p.712) to “the probability one atta-
ches to cooperative behavior by other parties”
(Hwang and Burgers, 1997, p. 67). Although
these two definitions are complementary to
each other so far as the mutual trust is con-
cerned, they represent the two divergent views
on the directions of trust. There are obviously
some consistent underlying themes regarding
the conceptualization of trust; and it is widely
agreed that trust is extremely important in on-
line business relationships (Venkatesh and Da-
vis, 1996). Many agree that trust entails both
perceived usefulness and perceived security in
online business (Coleman, 1990; Jarvenpaa
and Tractinsky, 1999). Hence it is all the more
important to build and maintain a positive rela-
tionship with an online customer (Morgan and
Hunt, 1994; Handy, 1995; Urban et al., 2000).
The present study focuses on understanding
how the customer’s intention to transact oper-
ates in the B2C online shopping environment.
Intention to Transact and Its Determinants
Previous experimental and empirical re-
search has demonstrated that what visitors are
exposed to and what they do at a site visit may
influence the dynamics of conversion probabil-
35
ities and the likelihood that a visitor will buy on-
line (Mandel and Johnson, 2002). According to
Zwass (1996), the intention to transact is the
customer’s intent to engage in an online ex-
change relationship with a web retailer, such as
sharing business information, maintaining
business relationship, or conducting business
transactions. B2C online shopping acceptance
necessitates that the customer intend to use a re-
tailer’s web site to obtain or provide informa-
tion and then complete a transaction by pur-
chasing a product or service. According to a
recent study by bizrate.com (Bizrate.com, Sep-
tember 5, 2006), more than 75 per cent of the
online customers abandoned their shopping
cart before the actual purchase, which obvi-
ously poses a tremendous problem for web
retailers as they prefer buyers and not just
browsers.
A number of previous studies have exam-
ined various determinants of intention to trans-
act with the online store (Mayer et al., 1995;
Jarvenpaa and Tractinsky, 1999; Saji, 2002;
Gefen et al., 2003; Suh and Han, 2003; Chan
and Lu, 2004; Hassanein and Head, 2004;
Chellappa, 2005; Cyr et al., 2005). In the pres-
ent study, the focus is on the commonly cited
determinants of intention to transact within an
online shopping context, that is, (i) Perceived
usefulness, (ii) Website trust, and (iii) Per-
ceived risk. The primary objective of this paper
is to test how the consumer’s online shopping
self-efficacy and social-presence embedded in
a website affects the customer’s intention to
transact.
It is to be noted here that theoretically, ‘per-
ceived ease of use’ was defined by Davis as “the
degree to which a person believes that using a
particular system would be free of effort” (Da-
vis, 1989; p.320], who suggested that it is simi-
lar to self-efficacy, which is defined as “judg-
ments of how well one can execute courses of
action required to deal with prospective situa-
tions” (Venkatesh and Davis, 1996, p.452).
This notion of self-efficacy has motivated the
researchers to exclude ‘perceived ease of use’
in the present study.
Trust
The trust-oriented perspective quickly gained
momentum after the introduction of wide-scale
 36 JOURNAL OF INTERNATIONAL CONSUMER MARKETING
e-commerce in the beginning of the 1990s
(Keen and Schrump, 1999). Trust can be
viewed as both a belief in the trustworthiness of
a partner and a behavioral intention to rely on a
partner in a situation of vulnerability. Credibil-
ity and benevolence are the underlying dimen-
sions of trust (Ganesan 1994; Doney and Can-
non 1997; Ganesan and Hess 1997; Saji et al.,
2005). Credibility refers to the buyer’s belief in
the seller’s expertise to do the job effectively,
while benevolence is based on the buyer’s be-
lief in the positive intention of the seller
(Ganesan, 1994; Saji et al., 2005). Trust is mul-
tidimensional involving two distinct cognitions
relating to provider competence and benevo-
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lence. Prior studies suggest that trust impacts
behavior and behavioral intent (Singh and
Sirdeshmukh, 2000).
While there are many definitions of trust, the
one that has been adopted for the present study
is “the willingness of a customer to be vulnera-
ble to the actions of an online store based on the
expectation that the online store will perform a
particular action important to the customer, ir-
respective of the ability to monitor or control
the online store” (Mayer et al., 1995). There are
a number of recent studies that have focused on
different impacts of online trust. According to
Shankar and Ratchford (2002), consequences
of online trust can be grouped into three broad
categories: (i) intent to act, (ii) stakeholder sat-
isfaction and loyalty, and (iii) firm perfor-
mance. Trust affects attitude and risk percep-
tion, which in turn influence the willingness to
buy through an electronic store (Jarvenpaa and
Todd, 1997). Thus we hypothesize:
H1: Increased level of customer trust will
have negative effect on perceived risk
associated with online shopping.
H1a: Increased level of customer trust will
result in a more positive attitude to-
wards the intention to transact through
the online store.
Perceived Usefulness
The Technology Acceptance Model (TAM)
has long been considered a robust model for un-
derstanding how users develop attitudes to-
wards technology and when they decide to
adopt it (Davis, 1989; Mathieson, 1991; Straub
et al., 1995; Szajna, 1996). The two major belief
variables of TAM are perceived usefulness and
perceived ease of use of the technology. Per-
ceived usefulness is defined as the user’s sub-
jective probability that using a specific applica-
tion system will increase his or her job
performance within an organizational context
(Davis et al., 1999). The present study, how-
ever, defines perceived usefulness as the degree
to which a consumer believes that using the sys-
tem from a website would provide access to
useful information, comparison, and faster
online shopping.
Perceived usefulness has been found to di-
rectly influence customer intention to return to
a website (Szajna, 1996). A few studies have
shown that perceived usefulness is positively
related to intention to return, but perceived ease
of use is not (Davis, 1989; Davis et al., 1989;
Koufaris et al., 2002; Venkatesh et al., 2003). A
few other studies, however, found that per-
ceived ease of use is also a significant predictor
of attitude towards and intended use of a web
site (Moon and Kim, 2001; Chen et al., 2002).
The present research aims to establish that per-
ceived usefulness of a website encourages the
customer to buy online. Thus we hypothesize:
H2: Higher perceived usefulness will result
in more trust with the online store.
H2a: Higher perceived usefulness will result
in more positive attitude towards inten-
tion to transact with the online store.
Perceived Risk
Almost all kinds of shopping activities in-
volve an element of risk, due to the uncertainty
in the purchasing decision. The amounts at
stake, and the buyer’s subjective assessment of
the chances of an unfavorable consequence, de-
termine the total amount of risk in any purchase
decision (Dowling and Staelin, 1994; Grewal et
al., 1994). The levels of purchase uncertainties
can also be affected by the mode of purchase or
the shopping interface (Wood, 2001). The mar-
keting literature started exploring the issue of
perceived customer risks since the pioneering
works of Cox and Rich (1964), Cox (1967), and
Bauer (1967). Consistent with the definition
 Satyabhusan Dash and K. B. Saji
proposed by Cox and Rich (1964), perceived
risk is defined in the present study as the nature
and amount of uncertainty perceived by an on-
line customer in contemplating a particular
purchase decision.
Perceived risk is defined as the uncertainty
that the customers face when they cannot fore-
see the consequences of their purchase deci-
sions (Frambach, 1993). Ostlund (1974) intro-
duced risk as an additional measurement of IT
adoption. A common and widely recognized
obstacle to e-commerce adoption has been the
lack of security and privacy over the Internet
(Bhimani, 1996). As risk is a subjective per-
sonal belief, the level of uncertainty inherent in
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a particular online transaction would vary from
one customer to another (Cox and Rich, 1964;
Sheth and Parvatiyar, 1995). Thus we hypothe-
size:
H3: Higher perceived risk associated with
online shopping will result in negative
attitude towards intention to transact
with the online store
Self-Efficacy
Online shopping self-efficacy or the belief in
one’s capabilities to organize and execute
courses of Internet actions required to produce
given attainments, is a potentially important
factor in efforts to adopt e-commerce. Per-
ceived complexity, knowledge barriers to ini-
tial e-service adoption, and comfort and satis-
faction issues faced by new users may be
construed as Internet self-efficacy deficits
(Eastin and LaRose, 2000). Gist and Mitchell
(1992) pointed out that self-efficacy has three
aspects. First, self-efficacy reflects an individ-
ual’s comprehensive judgment on whether they
are capable of implementing a specific task.
Second, the judgment on self-efficacy changes
as the individual obtains information and expe-
riences. Third, a self-efficacy judgment in-
volves a motivational factor that directly mobi-
lizes the individual’s behavior. As Bandura
(1997) pointed out, self efficacy is a more com-
prehensive perception process, which involves
the adaptation of an individual’s performance
to fit the given circumstances. Thus, customers,
who have the same skills, may behave differ-
ently during their online shopping.
37
Oliver and Shapiro (1993) found that the
stronger a person’s self-efficacy beliefs, the
more likely he or she would achieve the desired
outcome. Ajzen (2002) extended the Theory of
Planned Behavior (Ajzen, 1991) by including
self-efficacy as a behavioral control variable to
deal with situations in which people may lack
complete capability to exercise control over
their behavior. For researching e-commerce
adoption, this addition is significant as it relates
the causal link between Internet self-efficacy
and e-commerce adoption. Furthermore, self-
efficacy judgments are also related to attitude
toward the behavior. Attitude toward the be-
havior reflects one’s favorable/unfavorable
feelings of behavioral outcome. Understanding
the adoption pattern and the role of Internet
self-efficacy in e-commerce adoption thus
constitutes an important research issue. Thus
we hypothesize:
H4a: Online shopping self efficacy will have
positive effect on Perceived useful-
ness.
H4b: Online shopping self efficacy will have
positive effect on trust.
H4c: Online shopping self efficacy will have
negative effect on perceived risk.
Website Social Presence
Website social presence implies the virtual
features incorporated in the online store that en-
ables the customer to avail information to take a
decision to purchase the right product with the
help of virtual advisors. The website social
presence cue explores how human warmth and
sociability can be integrated through the
web-interface in order to positively influence
consumer attitudes towards online shopping.
The social presence theory (SPT) regards social
presence as a quality inherent in a communica-
tion medium (Short et al., 1976). In the present
study, by following Fulk et al (1987), we con-
sider social presence as the extent to which a
medium allows users to experience others as
being psychologically present. Gefen and
Straub (1997) reported that the technology
adoption can be affected by the perceived social
presence of the medium. Prior research (Straub
 38 JOURNAL OF INTERNATIONAL CONSUMER MARKETING
1994; Gefen et al., 2003; Kumar and Benbasat,
2002) has suggested that the perception of
website social presence can positively influence
user trust and intentions in an online context.
The online shoppers from collectivistic na-
tional culture like India would give more em-
phasis to interpersonal orientation and will at-
tach great importance to website social presence
(Williams et al., 1998; Dash and Bruning,
2004). In a nutshell, we can expect the online
shoppers from India to consider the social pres-
ence embedded in the website as a key driver for
perceiving usefulness and developing trust to-
wards online shopping. On the other hand, so-
cial presence embedded in the website can be
Downloaded by [Erciyes University] at 19:13 27 December 2014
expected to reduce the perceived risk associ-
ated with the online shopping. Thus we hypoth-
esize:
H5a: Increased level of social presence em-
bedded in a website will result in
greater perceived usefulness of online
shopping.
H5b: Increased level of social presence em-
bedded in a website will result in
greater trust of online shopping.
H5c: Increased level of social presence em-
bedded in a website will have negative
effect on perceived risk associated with
online shopping.
The hypothesized model predicts that the in-
fluence of website social presence and con-
sumer self-efficacy on intention to transact
with an online store occurs though its main an-
tecedent factors, perceived usefulness, trust
and perceived risk (Figure 1).
METHODOLOGY
Context of the Study and Sample
The study population consists of the set of all
customers who could get involved in B2C online
transactions. The sampling frame consists of ten
Class-A cities in India, New Delhi, Mumbai,
Kolkata, Chennai, Hyderabad, Bangalore,
Lucknow, Bhubaneswar, Trivandrum, and
Indore. The sample size has been fixed as 1000;
FIGURE 1. Research Model
H4-a Perceived
Usefulness
H2-a
H5-a
H2
Self Efficacy
H4-b
H1-a
Trust
Intention To
Transact
H5-b
H4-c H1
H3
Social Presence
H5-c
Perceived Risk
and it has been decided to collect 100 responses
each from each of these ten cities. The sampling
method used for fixing the sample size ele-
ments was systematic sampling. The data has
been collected by resorting to a survey, specifi-
cally a questionnaire method. The research tool
used for the data collection was a structured
questionnaire, which consists of an instrument
constructed to measure the study variables, viz.
perceived usefulness, trust, perceived risk,
self-efficacy, social presence and intention to
transact.
The response rate was found to be 51 per
cent, as we received 510 filled-in question-
naires from the respondents. After elimination
of questionnaires, wherein excessive amounts
of data were missing, we were left with 486 re-
sponses. A brief description of the sample pro-
file is given in Table 1 of the appendix.
All respondents in the sample are Internet us-
ers and have prior experience in online shop-
ping at their individual level, not for their orga-
nization. Among the respondents 50 per cent
have above eight years of experience on using
the Internet, with the average number of years
of Internet exposure by the respondent being
six years. On an average, the respondents have
purchased products online 17 times a year. The
data has been collected by resorting to a web
survey.
Approach to Data Analysis: Sample Size
To assess the relationships among the con-
structs, a Structural Equation Modeling (SEM)
programme (AMOS 4) was used. Although
SEM is attractive in testing model robustness,
there is a requirement relating to sample size.
Both estimation methods and test of model fit
 Satyabhusan Dash and K. B. Saji
TABLE 1. Sample Characteristics
Characteristics Category
Gender Male
Female
Job position held Lower level Managers
Middle level Managers
Sr. Managers (Director/V.P./G.M.)
Age groups Under 30 years
31-40 years
41-50 years
More than 50 years
Monthly income level Less than INR 10,000/-
INR 10,000-20,000/-
INR 20,000-30,000/-
More than Rs.30,000/-
Average number of online purchases by the respondent
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Average number of years of Internet exposure by the respondent
Cities chosen for the sampling frame
Note: (1) Figures in parentheses show the percentages to the total number of respondents
(2) US$ 1 = INR 44 (as on December 31, 2005)
are based on the assumption of large samples.
However, there is no absolute definition of
“large sample” (Hair et al., 1995; Ding et al.,
1995). In the present study, as far as the com-
plexity of the model in terms of latent con-
structs and indicators is concerned, a sample
size of 486 subjects is considered as sufficient
for SEM.
Measures
All the six study variables were measured
with multiple-item scales. The measurement
items used to measure different constructs in
this study were borrowed from previous estab-
lished studies and were modified in the light of
preliminary qualitative interviews to capture
unique features of the context of the study. A
five-point Likert-type scale was used for the
sake of uniformity in measuring the variables.
A total of 29 items (i.e. six items for perceived
usefulness, seven items for trust, four items of
perceived risk, five items for self efficacy, four
items for social presence, and three items for in-
tention to transact) were generated. Each of the
scale items used in this study and the sources
from where they were adopted are presented in
Table 2 of the appendix.
39
Number of respondents
394 (81)
92 (19)
208 (43)
221 (45)
57 (12)
260 (53)
112 (23)
92 (19)
22 (05)
139 (29)
107 (22)
87 (18)
153 (31)
16
6
New Delhi, Mumbai, Kolkata, Chennai,
Hyderabad, Bangalore, Lucknow,
Bhubaneswar, Trivandrum, and Indore,
Surat.
RESULTS OF DATA ANALYSIS
We followed a two stage procedure pre-
scribed by Anderson and Gerbing (1988) for
testing the theoretical model. The two-stage ap-
proach emphasizes the analysis of two concep-
tually distinct latent variable models: the mea-
surement model and the structural model. First,
the measurement model, which provides an as-
sessment of convergent and discriminant valid-
ity, is estimated before the structural model that
provides an assessment of predictive validity
and testing of research hypotheses.
Measurement Model
In order to provide an assessment of the reli-
ability, convergent and discriminant validity of
the measurement model, confirmatory factor
analysis (CFA) was done by using the AMOS 4.
As reported in Table 3 of the appendix, the fit of
the six-factor measurement model of online
shopping constructs on correlation matrix of 29
measures was originally acceptable [c2(362) =
861.14 (p < . 001); CFI = .91; IFI = .91; RMSEA =
.05]. An examination of modification indices
(MI) showed that the error correlation between
two measures of perceived usefulness (PU1
 40 JOURNAL OF INTERNATIONAL CONSUMER MARKETING

TABLE 2. Sources of Measurement Items

Constructs Measurement items Adapted from

My online store offers more useful information about the choices
PU1
available.
PU2 My online store improves my ability in assessing products online Hassanein
My online store enhances my effectiveness to purchase products/ and Head (2004);
PU3 Gefen et al. (2003)
Perceived services online
Usefulness Overall, I find online store is very much useful for purchasing
PU6
products/services.
PU4 My online store is more user-friendly than existing physical store
My online store eliminates time constraint; thus I can purchase Chan and Lu (2004)
PU5
products at any time I like
I don't perceive any risk by sharing my personal information
PR1
concerning my transaction with the online store.
I am confident that others can not tamper with information
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PR2
concerning my transaction with the online store.
Perceived Risk Chan and Lu (2004)
I believe that advanced technology can certainly provide the
PR3
desired security for my transaction with the online store.
I don't think that my money will get stolen whenever I transact
PR4
through my online store.
There is always a sense of human touch whenever I do interact Gefen and Straub
SP1
through my online store. (2004);
There is always a possibility of social networking through the
SP4 Finin et al. (2005)
Social interaction with my online store.
Presence There is always a sense of friendliness whenever I do interact
SP2 Brock (1998)
through my online store.
There is always a feeling of belongingness whenever I do interact
SP3 Brock (1998)
through my online store.
I do believe that the transaction through my online store is always
Trust1
safe.
I do believe that the transaction through my online store is always
Trust2
reliable.
I don't think that things may go wrong with my transaction through
Trust3 Chellappa (2005)
my online store.
Trust I am confident that my online store will promptly inform me if at all
Trust4
any problem occur with any of my transactions.
I am confident that my transaction through my online store will
Trust5
always be transparent
Trust6 I do believe that my online store always keeps my best interest.
Based on my past experience, I can say that my online store is Suh and Han (2003)
Trust7
trustworthy.
I am confident about online shopping if only the clear instructions
SE1
for my reference is provided online
I am confident about online shopping even if there is noone around
SE2
to show me how to use it.
I am confident about online shopping even if I have never
Self Efficacy SE3 Chan and Lu (2004)
experienced the same before.
I am confident about online shopping even if I have just seen
SE4
someone using it before trying it myself.
I am confident about online shopping if I have just the online help
SE5
function for assistance.
IT1 I would use my online store for purchasing a product or service Gefen et al. (2003)
Intention to
IT2 I would expect the use of my online store to continue in future too.
transact Suh and Han (2003)
IT3 I will strongly recommend the use of my online store to others.
 Satyabhusan Dash and K. B. Saji 41

TABLE 3. CFA Results of Indicator Variables in the Measurement Scale, with Mean and Standard Deviation

Constructs Measurement Factor Reliability Composite Mean S.D.

Items Loadings (Squared reliability
(l) multiple
correlation)
Perceived PU1 0.52 0.27 0.77 3.78 0.80
usefulness PU2 0.55 0.30 3.66 0.84
PU3 0.69 0.48 3.74 0.82
PU4 0.55 0.30 3.45 0.96
PU5 0.55 0.30 4.02 0.83
PU6 0.70 0.49 3.84 0.79
Perceived Risk PR1 0.64 0.41 0.78 2.98 1.01
PR2 0.70 0.49 2.81 0.97
PR3 0.69 0.48 2.27 0.86
Downloaded by [Erciyes University] at 19:13 27 December 2014

PR4 0.72 0.52 2.69 0.94

Social SP1 0.74 0.55 0.80 3.13 0.96
Presence SP2 0.77 0.59 3.30 0.95
SP3 0.73 0.53 3.28 0.94
SP4 0.58 0.34 3.13 0.90
Trust Trust1 0.70 0.49 0.87 3.41 0.88
Trust2 0.76 0.58 3.64 0.83
Trust3 0.70 0.49 3.31 0.86
Trust4 0.66 0.44 3.53 0.89
Trust5 0.68 0.46 3.41 0.80
Trust6 0.66 0.44 3.44 0.84
Trust7 0.74 0.55 3.67 0.81
Self Efficacy SE1 0.53 0.43 0.78 3.83 0.89
SE2 0.65 0.28 3.71 0.95
SE3 0.69 0.48 3.42 0.93
SE4 0.64 0.41 3.50 0.86
SE5 0.70 0.49 3.53 0.85
Intention to IT1 0.71 0.50 0.79 3.79 0.80
transact IT2 0.79 0.62 3.82 0.80
IT3 0.74 0.55 3.72 0.88

and PU2) and self efficacy (SE3 and SE4) had
the largest MI. A modification index estimates
the decrease of c2 that is obtained when freeing
its corresponding fixed parameter (Joreskog
and Sorbom, 1993). But freeing a parameter
simply to improve the poor fit without theoreti-
cal supports has been criticized by Cliff (1983).
Therefore, we avoided eliminating restrictions
between factor loadings, and between mea-
surement errors across subscales. After freeing
the error correlated measures within subscales
of trust, perceived usefulness and self efficacy
factor, the model had a better fit [c2(360) =
819.14(p < . 001); CFI = .92; IFI = .92; and
RMSEA = .05]. Although the c2 statistics is sig-
nificant (p > .05), the remaining good-
ness-of-fit indices (CFI, IFI, and RMSEA),
which are less sensitive to sample size, sug-
gested a good fit of the model.The CFI and IFI
reached 0.90, the recommended cut-off crite-
rion. The RMSEA for the model is below the
cut-off criterion 0.08 (Bentler, 1990; Bollen,
1989; Marsh and Hacever, 1985).
In assessing measurement reliability, Fornell
and Larcker (1981) stressed the importance of
reliability of each measure (individual item),
 42 JOURNAL OF INTERNATIONAL CONSUMER MARKETING
and the internal consistency of composite reli-
ability of each construct. The reliability of a
measure is simply its square loading, when the
variables are standardized. Composite reli-
ability is calculated as the squared sum of the
individual item loadings divided by the
squared sum of loadings plus the sum of error
variances for the measures. This measure of
internal consistency is similar to Cronbach’s
alpha (Cronbach, 1951) except Cronbach’s al-
pha assumes a priori that each measure of a con-
struct contributes equally to construct. Bagozzi
and Yi (1988) suggest that composite relia-
bilities of 0.6 or greater are desirable and that
the individual item reliabilities will be usually
Downloaded by [Erciyes University] at 19:13 27 December 2014
lower than composites. As shown in Table 3 of
the appendix, requirements for measurement
reliability were met with composite reliability
and reliability of each item in the scale reached
the recommended cut-off criterion of 0.60 and
0.30 respectively.
Apart from measurement reliability, con-
struct validity was assessed in terms of conver-
gent and discriminant validity. Anderson and
Gerbing (1988) suggest that “convergent valid-
ity can be assessed from the measurement model
by determining whether each indicator’s esti-
mated pattern coefficient on its hypothesized
underlying construct factor is significant (greater
than twice of its standard error)”. All factor
loadings in the sample were highly significant
and exceeded the 0.5 level, which is commonly
considered meaningful in factor analytic inves-
tigation. As indicated in Table 3 of the appen-
dix, all the factor loadings, ranging from 0.51 to
TABLE 4. Correlation Matrix of Latent Variables
PUse Trust
PUse .77
Trust .74 .87
SE .72 .65
PRisk ⫺.62 ⫺.83
SP .42 .49
IT .83 .82
Mean (S.D) 3.75 (.57) 3.48 (.63)
Note: The diagonal elements are the composite reliabilities of the respective measures.
0.85, were statistically significant (p < 0.01).
Therefore, the measures displayed adequate
convergent validity.
The assessment of discriminant validity was
conducted for all the correlated constructs. The
correlation matrices for the latent variables are
presented in Table 4 of the appendix. As indi-
cated in Table 4, the correlation coefficient be-
tween any two constructs was significantly be-
low unity, which supports the discriminant
validity of the two factors. In each correlation
matrix, the diagonal elements are the composite
reliabilities of the respective measurement
scales.
A stringent criterion for testing discriminant
validity is to fix the correlation parameter be-
tween two factors at 1.0 (as perfectly corre-
lated) and then employ a c2 difference test on
the values obtained for the constrained and un-
constrained models. A significant lower c2
value for the model in which the trait correla-
tions are not constrained to unity would indi-
cate that the traits are not perfectly correlated
and that discriminant validity is achieved
(Bagozzi and Phillips, 1982; Anderson and
Gerbing, 1988; Bagozzi and Yi, 1988). In order
to provide the stringent test on discriminant va-
lidity, chi-square measure was used as model
fitting criteria. In this test, the increase in c2 val-
ues with an additional degree of freedom
ranged from 83.99 (with Trust and IT con-
strained) to 415.48 (with PU and SP con-
strained). These indicated that improved fits
were obtained by separating the constructs.
SE PRisk SP IT
.78
⫺.63 .78
.38 ⫺.53 .80
.66 ⫺.69 .38 .79
3.59 (.65) 2.68 (.73) 3.20 (.73) 3.77 (.70)
 Satyabhusan Dash and K. B. Saji
Therefore the constructs displayed adequate
discriminant validity.
Results on Research Hypotheses
After achieving a satisfactory fit in the mea-
surement model, the structural model based on
a path analysis was then estimated. The good-
ness-of-fit indices were then evaluated to deter-
mine if the model could be considered reliable
in testing the hypotheses. The structural model
(c2(3) = 11.470, CFI = .99, IFI = .99, RMSEA =
.033) yielded a reasonable fit to the data. Al-
though the c2 statistics is significant (p < .05),
indicative of a poor fit, the other good-
Downloaded by [Erciyes University] at 19:13 27 December 2014
ness-of-fit indices indicated a good fit. The
comparative fit index (CFI) and incremental fit
index (IFI) were above the acceptable guideline
of .90. Additionally, the root mean error mea-
sure (RMSEA) was far below the 0.08 guide-
line of acceptability. Therefore, the model was
determined to be acceptable enough fit to pro-
ceed with further analysis. The establishment
of an identified final baseline model then al-
lows for testing of the hypothesized relation-
ships between constructs. The results of path
analysis are shown in Table 5.
H1 stated that the increased level of con-
sumer trust will have negative effect on per-
ceived risk associated with online shopping. As
indicated in Table 5, the effect of trust on per-
ceived risk is in the hypothesized direction and
is statistically significant (b = ⫺.52, p < .001).
TABLE 5. Results of Hypotheses Testing
Hypothesis Causal Path
H1 Trust ® Perceived risk
H1-a Trust ® Int. to transact
H2 Per. Usefulness ® Trust
H2-a Per. Usefulness ® Int. to transact
H3 Per. risk ® Int. to transact
H4-a Self Efficacy ® Per. Usefulness
H4-b Self Efficacy ® Trust
H4-c Self Efficacy ® Per. risk
H5-a Soc. Presence ® Per. Usefulness
H5-b Soc. Presence ® Trust
H5-c Soc. Presence ® Per. risk
Note: * P < 0.05 ; ** P < 0.001
43
Accordingly, this research hypothesis is strongly
supported. In hypothesis H1a, it was hypothe-
sized that increased level of consumer trust will
result in a more positive attitude towards inten-
tion to transact with the online store. The result
showed that the estimated effect is in the hy-
pothesized direction (b = .41) and is statistically
significant (p < . 001). Therefore the hypothesis
is supported.
H2 stated that higher perceived usefulness
will result in more trust with the online store.
The result is in the hypothesized direction (b =
.39) with statistical significance (p < .001); and
therefore the hypothesis is supported. H2a
stated that higher perceived usefulness will re-
sult in more positive attitude towards intention
to transact with the online store. The result
showed that the estimated effect is in the hy-
pothesized direction (b = .34, p < .001). Thus
the hypothesis is strongly supported.
In H3, it was predicted that higher perceived
risk associated with online shopping will result
in negative attitude towards intention to trans-
act with the online store. The estimated effect of
perceived risk on intention to transact is in hy-
pothesized direction and significant (b = ⫺.09,
p < .05). It indicates that increased perceived
risk reduces the intention to transact with the
online store. Therefore this hypothesis is
strongly supported.
H4a predicted that online shopping self-effi-
cacy will have positive effect on Perceived use-
fulness. As expected, the hypothesis is sup-
Path Coefficient Supported
⫺.52** Supported
.41** Supported
.39** Supported
.34** Supported
⫺.09* Supported
.50** Supported
.25** Supported
⫺.18* Supported
.20** Supported
.20** Supported
⫺.15** Supported
 44 JOURNAL OF INTERNATIONAL CONSUMER MARKETING
ported and it is statistically significant (b =
⫺.50, p < . 001). Accordingly, this research hy-
pothesis is strongly supported. H4b hypothe-
sized that online shopping self-efficacy will
have positive effect on trust. The effect of on-
line shopping self-efficacy on trust is in hypoth-
esized direction (b = .25) and is statistically sig-
nificant (p < .001). Accordingly, the hypothesis
is strongly supported. In H4c, it was predicted
that online shopping self-efficacy will have
negative effect on perceived risk. The effect of
online shopping self-efficacy on trust is in hy-
pothesized direction (b = ⫺.18) and statisti-
cally significant (p < .001). Accordingly, the
hypothesis is strongly supported.
Downloaded by [Erciyes University] at 19:13 27 December 2014
In H5a, it was predicted that higher level of
social presence embedded in a website will re-
sult in greater perceived usefulness in online
shopping websites. The result showed that the
effect is statistically significant and is in hy-
pothesized direction (b = .20, p < . 001). Thus
we accepted this hypothesis. In H5b, it was hy-
pothesized that increased level of social pres-
ence embedded in a website will result in
greater trust in online shopping websites. The
result showed that the effect is statistically sig-
nificant and is in the hypothesized direction
(b = .20, p < .001). Thus we accepted this hy-
pothesis too. H5c hypothesized that the in-
creased level of social presence embedded in a
website will have negative effect on perceived
risk associated with online shopping. As hy-
pothesized, the effect of social presence on per-
ceived risk is found statistically significant and
in hypothesized direction (b = ⫺.15, p < .001).
This confirms our belief that social presence
embedded in a website reduces the perceived
risk association.
DISCUSSION AND CONCLUSION
The present research contributed a model
that gives several noteworthy insights on the
role of consumer self-efficacy and website so-
cial presence in consumer’s adoption of B2C
online shopping in the context of India. The
study showed that the consumer trust building
measures would lead to reduction in perceived
risk associated with online shopping, which
would in turn result in a more positive con-
sumer attitude towards purchase intention. The
study clearly demonstrated that online market-
ing strategies linked to perceived usefulness
would help online marketers to build consumer
trust, which would also lead to a favorable pur-
chase intention by the customers. Most impor-
tant of all, the results of the study have clearly
indicated that both consumer self-efficacy and
website social-presence affect trust and per-
ceived usefulness among online customers,
and consequently, positively influence the cus-
tomer’s intention to purchase products and ser-
vices online. The findings of the present study
extend the scope of the previous research on
consumer self-efficacy, website social-pres-
ence, and purchase intention in B2C online
shopping.
From a practitioner’s point of view, results of
this study have far reaching implications on ef-
fective online website design. The study pro-
vides valid empirical evidence towards in-
creased level of social presence embedded in a
website, resulting in greater perceived useful-
ness, trust and reduced perceived risk associ-
ated with online shopping. The study has
clearly demonstrated that online trust could be
built up by infusing website social presence
through creating a sense of human touch, social
networking, friendliness, and a feeling of be-
longingness on the online portal. By infusing a
significant motivational factor like consumer
self efficacy through facilitating clarity of on-
line instructions, user friendly online buying
environment, exposure to past online buying
experience, and real time online buying experi-
ence, the online marketers can expect to win the
much needed self-confidence of online cus-
tomers.
Apart from the managerial implications, the
findings of the study have a few theoretical im-
plications too. First, the study attempts to intro-
duce both consumer self-efficacy and website
social presence together to the research of on-
line trust for the first time in the Indian context.
While self-efficacy and social presence have
been introduced and utilized in a considerable
amount of research in information and behav-
ioral sciences earlier, little is known of con-
sumer self-efficacy and website social pres-
ence in the context of online marketing in
general. Second, the present study tries to theo-
retically explore significant antecedents of
 Satyabhusan Dash and K. B. Saji
trust, perceived usefulness, and perceived risk
in B2C online marketing transactions. Third,
the study has demonstrated the role of a motiva-
tional factor like consumer self efficacy in neg-
atively influencing perceived risk and posi-
tively influencing perceived usefulness and
developing trust. Last of all, the study presents a
unique perspective in marketing research by
successfully demonstrating how consumer
self-efficacy and website social presence can
effectively be explored in strategizing pertinent
mechanisms of trust, perceived usefulness, and
perceived risk.
The present study has a few limitations too.
First, the sampling frame fixed used for the
Downloaded by [Erciyes University] at 19:13 27 December 2014
study, though representative of the population,
accommodates only a defined strata of Indian
society, who have access to Internet and have
prior exposure to online shopping environ-
ment. This obviously limits the scope of gener-
alization of the results of the study. Second, the
limited sample used for the study, though repre-
sentative of the sampling frame, limits the
scope of application of the results of the study to
broader consumer groups with varying inter-
ests. Third, the study asked the respondents to
give their responses based on their past online
transaction experiences. It is acknowledged
here that, although this measuring method has
the advantage of capturing the overall percep-
tion of the respondents, their responses based
on long-term retrospection (one year) may di-
lute the reliability of the findings of this study.
To overcome this limitation, future studies may
have to focus on a shorter time frame, such as a
month. Fourth, the present study by and large is
generic in nature, which may limit the scope of
application of the results of the study to all in-
dustry segments. Hence it is recommended that
future research can either be product specific,
consumer specific, or industry specific.
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SUBMITTED: September 2006
FIRST REVISION: December 2006
SECOND REVISION: February 2007
ACCEPTED: March 2007